Outbreak of Commonsense...

... in Scotland:

Councils will be given new powers to increase council tax on Scotland's 25,000 long term empty homes raising up to £130 million over four years to build low cost homes, it was announced today.

The changes are expected to deliver around 800 homes annually and support 1,500 jobs in the construction sector and wider economy. The measures are contained in a new policy paper, Homes Fit for The 21st Century, which sets out the Scottish Government's vision for housing to 2020...

'Up to' £130 million divided by 25,000 homes divided by four years = £1,600, so what they are going to do is to allow councils to double the Council Tax on 'long term empty homes' (footnote 19 here).

What they overlook is the following:

i) If the Council Tax surcharge is set high enough, those LTE homes will be brought back into use within the four years anyway, so maybe all 25,000 homes would be brought back into use, so the expected extra income of £32.5 million a year would dwindle to nothing.

ii) If homes are being brought back into use, then a lot of them will need work doing to them, probably in the region of £10,000 each, but this will be private owners spending about £250 million of their own money.

iii) So there's little need for the Scottish government to try and spend all that £130 million (a lot of which won't materialise, see i) trying to 'deliver around 800 homes annually' because the tax system will be delivering 6,250 homes annually.

iv) Neither is there any need for the Scottish government to try and 'support 1,500 jobs in the construction sector' because the private sector would be employing an additional 1,500 people anyway - see ii).

v) Deciding what it long term empty is a very tricky business. Is a holiday home that is used for a few weekends a year 'long term empty'? By their standards, probably not, so all the owner of a vacant home would have to do is camp out there a couple of weekends a year and register it as a holiday home. So it would be administratively simpler to just double Council Tax on every home and then give every Scottish resident a 'Council Tax cash rebate voucher' worth £500 (or whatever the figure is).

vi) The Scottish government does have restricted powers to vary local tax rates, not just Council Tax but also income tax (increase or reduce by three per cent) or apparently reduce SDLT a bit. So if there's money to spare, then why not use it to cut bad taxes like SDLT or income tax rather than building housing? Going by their ridiculous over spend on their own Assembly building, that looks like a recipe for disaster.